As world leaders, government authorities, development agencies and civil society organizations are eagerly anticipating the release of the official adoption of the UN Sustainable Development Goals in September of this year, the tough questions on how these ambitious goals and targets will be financed are very much up in the air.
Difficult Decisions at FFD3
This week, the Financing for Development Conference was being held in Addis Ababa, Ethiopia in an attempt to lay out a new development finance strategy for the next 15 years. On the agenda were difficult topics related to the private sector’s role in development, increases to overseas development assistance, reductions in illicit financial transactions and the establishment of a global tax body under the UN system. The agreement on a new development financing strategy is quite important as it has been estimated that the SDGs will require $11.5 trillion USD per year and $172.5 trillion over the next 15 years to be achieved in full. What makes this agreement even more challenging, is that global stakeholders were meeting in Addis to work out an agreement without having the indicators for the SDG finalized, meaning that financial commitments were being pushed forward without full clarity on how the SDGs will be evaluated.
One of the controversial topics of the Addis Conference was the resolution of multinational tax avoidance and the formation of an intergovernmental body that could monitor corporate activity and global cash flows. Such an intergovernmental entity would prevent multinational corporations from taking advantage of corrupt and inefficient tax systems in developing countries. The lack of such control has been highlighted as a major loss of revenue for international development efforts with the IMF reporting that developing countries were losing up to $212 billion USD each year through eroded tax bases and profit shifting by multinationals. Despite the strong push from developing countries and civil society organizations, delegations from wealthier countries resisted the establishment of this global tax body and eventually agreed on an easier stance that corporates were to respect tax systems “in accordance with national and international laws and policies.”
Electing not to form an official intergovernmental body represents a missed opportunity to formalize such a system of global capital controls that could have significantly increased finances available for development initiatives at the heart of the SDGs. These resources must be mobilized through a combination of domestic investment, government tax revenue and increased development assistance. CYFI calls on governments returning from the Addis Conference to follow through on their commitments to invest 0.7% of their national budgets to international development and cooperation initiatives. Additionally, CYFI calls on governments to devote a larger portion of their national budgets to concrete projects that will help to achieve many of the targets listed under the SDGs, particularly those related to the financial capability and economic empowerment of young people.
The importance of Investing in Education
Education, for example, is one crucial area to invest more in as education can benefit not only the young generation but a country at large. The UNESCO Director General Irina Bukova has recently stated that investments in quality education can “increase a country’s gross domestic product per capita by 23% over 40 years.” CYFI supports the education authorities that made the commitment at the recent World Education Forum in Incheon Korea to increase domestic spending on education to at least 15 to 20 percent of total public expenditure. We believe that greater investment in financial, social and livelihoods education particularly can have a tremendous impact on the economic well-being, quality of life and social inclusion of young people around the world. A challenging road lies ahead for the global community to adequately mobilize the resources that will allow the ambitious SDGs to be achieved. Amidst the cacophony of voices at the Addis Conference this week, the hope of CYFI is that a more united voice in support of economic citizenship for children and youth emerges that will drive resource allocation for education, political participation and economic opportunities, and keep young people at the center of the SDGs and the post 2015 development process.
This blog is the fifth in a series of summer blog articles related to the Post-2015 Sustainable Development Goals and are authored by youth interns at Child & Youth Finance International. Join the discussion on social media by following @ChildFinance and using the hashtag #cyfiyouth.